Sunday, December 03, 2006

Where the Nutty Misuse of a Metaphor Leads the Afflicted

“The answer is to be found in that great proto-Smithian philosopher, Jesus Christ, who said, "Do unto others as you would have them do unto you" (which, by the way, was a subtle advancement in economic theory over the admonition of one of his teachers Rabbi Hillel, who said "Do not do to others that which is hateful to you"). The deal is this: If you do only that which completes the task asked of you by the customer (or your "neighbor"), you will have fulfilled the letter of the economic law, but not the spirit of excellence. Christ knew that there was an Unseen Hand through which, if everyone did what was in their own interest economically, and in which some also extended an attractive, quality product to others, that the individual's self-interest would lead to a vibrant economy in a in a free market, and the individual's altruism would lead to personal gain (market share): just the reverse of what one would expect.”

CommentSmith wrote in Moral Sentiments:‘it is the great precept of nature to love ourselves only as we love our neighbour, or what comes to the same thing, as our neighbour is capable of loving us’ (TMS I.i.5.5 p 25).

The above about the ‘unseen hand’ is the typical religious twist placed on Smith’s use of the metaphor of ‘an invisible hand’ and the assertions that follow are not all that different from those Chicago-influenced neoclassical economists who turn Smith’s special case – unintended actions could have socially benign consequences, but may not have, given the fallibility of human nature – into a universal general rule, which, not always unintentionally, ends up justifying all human self-interested actions in a spirit of Panglossian best-of-all-possible-worlds, irrespective of the consequences of the practices of monopolists, polluters and protectionists on society generall and consumers in particular that may be contained within them.

I post it here purely in the interests of showing that Lost Legacy is not about crying wolf; those howls in the night (er, a metaphor, not a theory) in praise of superstitious theories of invisible hands running markets are all too real and widely prevalent.